Pound US Dollar Exchange Rate Rockets Past $1.37 as Biden’s First Moves in Office Cheers Markets

Pound US Dollar Exchange Rate Rallies in Upbeat Trade

The Pound to US Dollar (GBP/USD) exchange rate is on the rise this morning, striking its highest levels in over two years as an upbeat market mood prevails.

At the time of writing the GBP/USD exchange rate is trading at around $1.3743, up roughly 0.5% from this morning’s opening rate.

US Dollar (USD) Falls as Biden’s First Moves Boost Stimulus Hopes

The US Dollar (USD) is trending lower against the Pound (GBP) and the majority of its other peers this morning as demand for the safe-haven currency is undermined by rising market risk appetite.

This risk-on tone comes as the market mood continues to improve in the wake of Joe Biden’s inauguration and this first moves since becoming US president.

Shortly after being sworn in Biden immediately got to work signing a series of executive orders, many of which aimed to reverse the policies of his predecessor, but most importantly for market, sought to begin tackling the coronavirus pandemic.

Biden seemed particularly cheered by Biden’s push to get his $1.9 trillion stimulus package through Congress as soon as possible, with the President extending an olive branch to Republicans in hopes of building bipartisan support.

Pound (GBP) Rally Supported by UK’s Vaccine Rollout

Meanwhile, the Pound (GBP) is on the rise again this morning, as Sterling continues to benefit for the UK’s aggressive coronavirus vaccine rollout.

The latest figures from the government claim that over 4.6 million people in the UK have now received their first dose of a vaccine, after a record 343,000 jabs were administered on Tuesday.

With the vaccine rollout continuing to accelerate Minister appear confident that its target of vaccinating the 15 million people in the most at risk groups by mid-February.

The pace of the UK’s vaccination rollout has been welcomed by GBP investors who hope that it will allow for a lifting of lockdown measures sooner rather than later and accelerate the UK’s economic recovery.

Pound US Dollar Forecast: Will a Rise in US Jobless Claims Put More Pressure on the US Dollar?

Still to come today we have the publication of the latest US initial jobless claims, which could send the Pound to US Dollar exchange rate even higher later this afternoon.

For the week ending 9 January we saw a sharp rise in new unemployment claims, with claims rising to 965,000, their highest levels since August.

Should this uptrend have continued last week we could see new claims past 1 million, an outcome which would likely stoke concerns about the state of the US jobs market and weigh on the US Dollar.

Meanwhile, the Pound could also face some headwinds in the latter half of this week with the publication of the UK’s latest PMI figures.

With a strict national lockdown in place, there’s little doubt that January’s preliminary figures will report a contraction in private sector activity, but a larger-than-expected slump could be costly for Sterling.

Matthew Andrews

Contact Matthew Andrews